In Northumbria Healthcare NHS Foundation Trust v HMRC [2022] UKUT00267, the Upper Tribunal (UT) found the provision of car parking by an NHS trust was subject to VAT.

  • The Trust provided parking facilities which were mostly used by staff and patients, but some sites were close to local amenities.
  • Parking fees were charged at different levels for different users based on guidance.
  • The Trust did not charge VAT on the parking fees.
  • HMRC raised assessments on the basis that the Trust was a taxable person and should have accounted for VAT accordingly.
  • The Trust’s Appeal to the First Tier Tribunal was dismissed as:
    • The Trust should be regarded as a taxable person, it was not supplying parking as part of a 'special legal regime'.
    • The supply of parking was not closely related to the supply of medical care, so the parking was not also exempt.
    • The supply of parking was an economic activity so was not outside the scope of VAT.
  • The Trust appealed to the UT.

The UT found that:

  • The FTT had not erred in law in finding the Trust did not provide parking through a special legal regime as:
    • The guidance under which the Trust operated the car parks was not constricting the services to a significant extent for them to be closely linked to the powers of the public authority.
    • A special legal regime required sufficient elements deriving from national law, a public law duty to follow guidance was not enough.
  • The FTT had not erred in law in finding treating the Trust as non-taxable would distort competition as:
    • The guidance that the Trust followed recognised that competition could arise with local operators.
    • If VAT exemption was available it could lead to the distortion of that competition in a significant way.

The appeal was dismissed.

Useful guides on this topic

Practical Tax Guides to VAT for the SME adviser and owner

Appeals: VAT
How do I appeal a VAT penalty?  How can I request a Statutory Review? How do I appeal an HMRC decision?   

External links

Northumbria Healthcare NHS Foundation Trust v HMRC [2022] UKUT00267 

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